Public Meeting Transcripts

Public Meeting Regarding NationsBank and BankAmerica

Friday, July 10, 1998

Transcript of Panel Eighteen

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23 MS. FADELLI: Good morning. My name is
24 Michelle Fadelli, and I'm the Manager of Communications
25 and Governmental Affairs for the Association of Bay Area
26 Governments, and I'm speaking today on behalf of
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1 Supervisor Mary King from Alameda County who regrets she
2 was not able to join you this morning.
3 Mary and I both would be representing the
4 Association of Bay Area Governments, which is an
5 affiliation of the nine counties and 97 cities in the
6 San Francisco Bay Area. I'll be just reading from a
7 letter that we submitted on June 16th, which is a
8 summary of comments that we heard at a much smaller
9 regional hearing that we held last month.
10 Number one, job losses. We are concerned
11 about the large number of jobs being eliminated and
12 particularly concerned about the number that will be
13 eliminated, not just in San Francisco but throughout the
14 Bay Area. We ask that employees receive reasonable
15 notice of any layoffs and that the new bank make a
16 commitment to job training and placement.
17 Number two, community development. We are
18 concerned about the recent community development
19 commitment that fails to provide specifics about
20 distribution throughout various states, regions and
21 communities; in addition, reference to small business
22 fails to provide specific commitments to minorities and
23 low-income and populations.
24 We are concerned about the preservation of B
25 of A's Community Development Bank and ask that the new
26 bank not compete with nonprofit housing developers in
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1 the Bay Area.
2 Number three, consumer protection. We are
3 concerned about branch closures, fee increases, ATM
4 availability and ATM fees and honoring commitments to
5 current customers.
6 If the new bank plans to save over a billion
7 dollars by 1999, we can only suspect that it is the
8 customers will feel the impact. The merger announcement
9 boasted that the new bank will have $570 billion in
10 assets. We ask how with this giant maintain hits
11 connection to the hometown customers.
12 Number four, fairness to minority and
13 low-income populations. It is stated that the
14 NationsBank has a reputation for generic lending, and
15 California is not a generic state. As an aside, our
16 association has forecast significant changes in regional
17 demographics. The Asian population will grow from 16
18 percent of the population in 1990 to 20 percent in the
19 year 2020.
20 The Hispanic population will grow from 14
21 percent to 24 percent by 2020 and the Caucasian
22 population will no longer be a majority at 47 percent.
23 We are concerned that NationsBank is not prepared to
24 deal with the diversity in California and especially the
25 Bay Area.
26 We are concerned with reports that
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1 NationsBank has a very poor record of lending to
2 minorities and low-income populations, lending only a
3 reported 6.3 percent to low-income households and even
4 lower percentages to minorities.
5 The new bank must not be dragged down by the
6 poor standards established by NationsBank. Similar
7 performance with minority and low-income lending will
8 not pass muster in the Bay Area.
9 We are concerned about the closure of San
10 Francisco BofA headquarters and the transfer of
11 decision-making to Charlotte. North Carolina is a long
12 way from California in miles and light years away, we
13 believe, in attitude.
14 Our concerns are not relieved by word that
15 global operations will be based in San Francisco. Such
16 operations will be looking west to the Pacific Rim and
17 will not be concerned about jobs and customer relations
18 in the rest of the Bay Area.
19 More generally, we are concerned about the
20 reduction of competition in this merger as well as other
21 proposed mergers in banking. With fewer banks, who will
22 be compelled to offer free checking, free ATMs, and true
23 customer service?
24 Mergers don't tend to favor consumers and
25 don't tend to favor small businesses. BofA customers
26 are our constituents and we voice our concerns on their
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1 behalf.
2 And this letter was signed by Mary King, the
3 ABAG, and Alameda County Supervisor.
4 MS. SMITH: Thank you. Ms. Corbin.
5 MS. CORBIN: Yes, thank you. I am here
6 representing West Contra Costa County. I am Rosemary
7 Corbin, the Mayor of Richmond. I want to thank you for
8 allowing me to testify this morning.
9 Located on the east shore of San Francisco
10 and San Pablo Bays, West Contra Costa is comprised of
11 the cities of El Cerrito, Hercules, Pinole, Richmond and
12 San Pablo and the unincorporated areas of El Sobrante
13 Kensington, Rodeo and Crockett. West County has
14 approximately a population of 200,000. The City of
15 Richmond, with a population of 93,000, is the largest,
16 oldest and most urbanized city in the area.
17 West County is a diverse community with
18 minority population of over 52 percent. While it
19 contains approximately 22 percent of the county
20 population, over 40 percent of the county's AFDC
21 recipients reside in West County and has many of the
22 largest low and moderate income neighborhoods in the
23 county.
24 However, it has some of the oldest
25 communities where the banks that are now moving to the
26 suburbs got their start.
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1 West County is a community where a majority
2 of its population live and work in the area or in
3 communities very close by. The West County Mayors and
4 the city staffs meet on a regular basis and act
5 collaboratively on issues such as transportation, waste
6 disposal, public safety and economic issues such as the
7 subject of this hearing.
8 Our West County chambers of commerce, cities
9 and institutional institutions and nonprofit
10 organizations collaborate through a variety of
11 organizations.
12 Finally, we are an effective lending
13 territory as described by the Federal Reserve Bank of
14 San Francisco and believe that the Bank of America and
15 NationsBank, should this merger go forward, have an
16 obligation to develop a plan with West County business
17 government and community leaders for addressing the
18 community reinvestment needs in our area.
19 Bank of America has nine branches in West
20 County and, with over $425 million in business and
21 household deposits, is the second largest bank in our
22 community.
23 In terms of banking services, while BofA has
24 not closed any branches in West County, it has downsized
25 and relocated, which had been freestanding bank
26 branches, to cramped in-store branches, particularly in
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1 low-income areas such as Richmond's Iron Triangle
2 neighborhood.
3 While we applaud BofA's innovative
4 initiatives in reinvestment lending, they appear to have
5 had little visible impact in West County. One bright
6 spot was a $625,000 loan and assistance with welfare-
7 to-work-planning to Rubicon programs, a job and housing
8 development nonprofit agency serving special needs
9 populations.
10 Should this merger go through, we want to see
11 the continuation and strengthening of the BofA's
12 Community Development Bank, and we are requesting that
13 BofA begin a process of assisting West County for
14 developing a plan for meeting our community reinvestment
15 needs.
16 I often describe West County as being in a
17 money shadow. You probably know what a rain shadow is.
18 Well, when money floats down from the federal
19 government, we tend to be behind this rain shadow where
20 the money goes to Oakland and San Francisco, and we
21 think that community, as defined under the Community
22 Reinvestment Act, should include the whole community.
23 West County's specific needs in terms of
24 community economic development are:
25 Financing for commercial rehabilitation and
26 facade improvements in conjunction with redevelopment
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1 and other public financing in the older retail and
2 commercial areas of Richmond, El Cerrito, Pinole, San
3 Pablo, Rodeo and Crockett;
4 better access to financing for young small
5 businesses, particularly minority and women-owned
6 businesses through collaboration with business
7 development organizations such as the West County
8 Business Development Center and the local chambers of
9 commerce;
10 financing for various major development
11 projects in West County, including the Richmond Transit
12 Village, Ford Assembly Building rehabilitation, Point
13 Molate reuse and the business incubator for bioscience
14 business;
15 In terms of housing, we need new affordable
16 development such as Richmond Transit Village, a 52-unit
17 senior housing project, Cortez and Woods school sites
18 and Pinole commercial properties owned by a subsidiary
19 of BofA which the city would like to develop for senior
20 housing;
21 In-fill new construction and rehabilitation
22 throughout older developed neighborhoods throughout West
23 County.
24 Vacant closed branches for a are a problem
25 for all of us. The bank needs to work with cities and
26 economic organizations to develop commercially viable
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1 reuse programs for branch facilities at closes such as
2 the Richmond Ninth street branch.
3 And, finally, we have a relatively high
4 unemployment rate. The bank needs to mitigate the loss
5 of jobs from this merger and commit to the hiring and
6 promotion of women and minorities.
7 In summary, West Contra Costa is concerned
8 about how you define community and how you can ensure
9 that all of the bank's community will be served. We do
10 not believe that the proposed CRA plan contains enough
11 specific goals or the monitoring necessary to enforce
12 them.
13 We need area-specific community reinvestment
14 plans with community input. Also, the potential loss of
15 CRA leaders within the Bank of America causes us to
16 worry about commitment.
17 We applaud BofA's history of innovation
18 regarding community reinvestment and its ability to work
19 with all segments of the community, including nonprofit
20 organizations.
21 We are looking to the Federal Reserve Bank to
22 ensure the continuance of a commitment to the innovation
23 from the merged bank and that commitment will extend to
24 all parts of the community.
25 Thank you.
26 MS. SMITH: Any questions of Ms. Corbin?
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1 MR. FRIERSON: Mayor Corbin, could I ask you
2 a question, please?
3 MS. CORBIN: Yes.
4 MR. FRIERSON: You mentioned that one of the
5 things you were advocating was the continuation of the
6 strengthening of the Bank of America Community
7 Redevelopment Bank, and we've heard quite a lot about
8 that organization yesterday, and I expect we'll hear
9 more today.
10 Could you elaborate a little bit on your
11 relationship with the bank and it's projects or any
12 types of developments they have done in the City of
13 Richmond?
14 MS. CORBIN: That's what I referred to in
15 terms of the money shadow we are in. The Bank of
16 America has funded the Rubicon program, which we are
17 very grateful for, but we think that in defining
18 community, too often Oakland is seen as taking care of
19 the whole -- the Oakland area is seen as taking care of
20 the whole of the East Bay, and we're saying that
21 community has to include West Contra Costa County as
22 well.
23 I used to live in San Francisco, and I was a
24 librarian at San Francisco Public and used to get in
25 arguments about the fact that Richmond is not in Alameda
26 County and it's not a suburb of Oakland.
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1 I think too often people don't understand
2 what we are. They should come. I'll give him a tour
3 and they can see that it's a lot -- the East Bay is a
4 large area and we're probably -- this is probably just
5 one example of others throughout the Bay Area where, if
6 you sit in an office in San Francisco or, God help us,
7 in North Carolina, and you think that because you are
8 doing something in Oakland you are doing it for the
9 whole East Bay, you are wrong, and we're very concerned
10 about that because we have suffered from that.
11 I don't want to take anything away from
12 Oakland. I just want to be sure we get our fair share.
13 Any other questions?
14 MS. SMITH: Thank you.
15 MS. CORBIN: Thank you.
16 MS. SMITH: Thank you very much.